Amongst the many interesting Nicaragua facts, the cost of living is an important one, especially if your retirement budget isn't as high as you had hoped for.
We are going to use our benchmark of $1,300 per month as baseline. Can you retire in Nicaragua on less than $1,300 per month? According to Christopher Howard's "Living and Investing in the New Nicaragua", a couple should budget at least $750 per month.
This includes rent for a small house and rather simple living. 3,000$ a month will buy you a luxury lifestyle, with rental of a spacious furnished house, full time maid, and eating out every night.
But who needs to eat out every night? If you choose the golden middle way between living frugally and like royalty, a monthly budget of $1,300 will do just fine in most parts of Nicaragua.
Some items, like household appliances, computers and cars are about 30% more expensive than in United States or Europe. The price of gasoline is fairly high: US$3.80 per gallon or $1 per liter (at the time of writing). However, it is still a steal for most Europeans.
Most expats would agree that electricity is more expensive than back home. Of course, the total cost reflects lifestyle choices. For example, my own electricity bill is sometimes as low as US$15, and never higher than US$50.
The house I am renting has high ceilings and the placement of the windows allows for a cool breeze during the nights. There’s no air conditioning, and we use our fans only during the hottest months.
One huge advantage for some people is the affordability of household help. A full-time maid, cook or gardener commands a salary of between US$140 to $200 per month (with US$140 being the equivalent to the current minimum wage for domestic help).
There are three big supermarket chains in Nicaragua where you can get most of those "good old back-home" goods. They are La Union, La Colonia and Palí. La Colonia is the only Nicaraguan-owned chain, and my personal favorite.
I find the quality of meat and fish offerings in the fresh food counter at La Colonia to be better than the one at La Union. Palí is the cheapest of the three supermarkets, but it also has a smaller selection of goods (a bit like Aldi or similar discount stores).
I often wonder how the locals can afford to buy stuff in the supermarkets. Most imported goods are more expensive than in Europe or United States. A prime example is the cost of Nutella. A 400g (13 oz) jar costs about US$3.50 in Europe or the U.S., and over US$6 in Nicaragua!
Locally grown fruit and vegetables, however, are a steal in comparison, especially if you buy them at one of the "mercados" instead of a supermarket. Meat, fish and seafood are also less expensive.
I can’t forget to mention that locally brewed beer is cheap, and so is the famous Flor de Caña rum. Wine, on the other hand, is expensive.
What about eating out in restaurants? There is an abundance of good and cheap eating establishments in Nicaragua. (In the bigger towns, menus include local and foreign cuisine.) I’ve eaten a full meal with a drink for as little as US$5 and as much as US$40. On average, the price is somewhere in between.
Overall, the cost of living in Nicaragua is cheaper than in United States, Europe or Canada, especially when you compare the lower costs for "big expenses" (housing, real estate, health care and labor cost). Without a doubt, you can easily retire on a small budget.